South Africa suffers economic crime ‘pandemic’

South Africa suffers economic crime ‘pandemic’

Economic crime has reached ‘pandemic’ levels in South Africa, according to a survey released today that reveals the burden of corruption on the struggling economy.

PwC’s Global Economic Crime Survey reveals that over 69% of organisations in the country have reported incidents of economic crime in the last 24 months, a significantly higher percentage than that recorded by African and global peers.

Almost a fifth of 232 organisations polled reported losses of between $100,000 and $1m due to crime, with the theft of company assets apparent in 68% of cases. The companies also noted high instances of procurement fraud, bribery and corruption.

“When compared to the global statistic of 36%, we are faced with the stark reality that economic crime is at a pandemic level in South Africa. No sector or region is immune from economic crime,” says Louis Strydom, forensic services leader at PwC Africa.

The survey also reveals that local businesses have little confidence in the police’s ability to respond. Over 70% of respondents believe that South African agencies do not have adequate resources and training to clamp down on economic crime.

Few are expecting a strong fightback from the government. Under the leadership of President Jacob Zuma, the ruling ANC has been accused of backsliding on corruption and running a government based around patronage networks and the emergence of ‘tenderpreneurs’ – well-connected individuals who use their influence in government to secure lucrative business contracts.

Since taking office in 2009, Zuma has been mired in personal and political scandal. The president has been ordered to pay back a portion of the $23m of taxpayers’ money that he used to improve a private residence. Separately, the High Court is considering an opposition request to reinstate 738 corruption charges against the president dating back to a multi-billion dollar arms deal signed in the late 1990s.

The government has also been accused of using the country’s troubled state-owned enterprises (SOEs) as a tool to disburse favours and reward loyalty. Those allegations were amplified in December, when Zuma replaced Nhlanhla Nene, the country’s respected finance minister and a critic of SOE leadership, with David Douglas Van Rooyen, an unknown backbench MP.

Finance minister Pravin Gordhan, who replaced Van Rooyen after an international outcry, has prioritised reform at SOEs, arguing that leaders should cease using the businesses as a “personal toy from which you can extract money when you feel like it.”

Yet many observers believe that he does not have the political capital to push through radical reforms.

Written by David Thomas

David Thomas is Digital Editor at IC Publications and a features writer at African Business Magazine. He has previously been published at the Financial Times, Wall Street Journal and South Africa's Cape Times.

Events

IC Publication's Sister Sites

New African

For over 45 years New African provides unparalleled insights and analysis on African politics and economics, via an African perspective. With our in-depth monthly reports, New African brings Africa closer to the world and is ideal reading for those looking to gain a better understanding of the most important issues affecting Africa.

New African Woman

Established in 2009, New African Woman has been covering stories that empower, inspire, and celebrate the African woman’s diverse accomplishment in all spheres. It is a colourful lifestyle magazine dedicated to providing in-depth coverage of fashion and beauty, health and wellbeing, parenting and family, and much more

IC Events

IC Events has established itself as one of the leading organisers of African business, economic and political events. From small workshops to large awards ceremonies, our events are recognised as some of the premier fixtures on the international calendar, and provide an excellent opportunity to network with the current decision makers and leaders from around the world.

IC Publications

IC Publications is one of the world’s leading sources of analysis and debate on African political and economic issues. Using a variety of platforms and services including magazines, electronic media and international events, we deliver unparalleled coverage on the latest developments in Africa.